The India BPO Promotion Scheme (IBPS) has been approved under Digital India Programme, to incentivize BPO/ITES Operations across the country [excluding certain Cities and the States in North East Region (NER)], for creation of employment opportunities for the youths and growth of IT-ITES Industry. IBPS aims to incentivize establishment of 48,300 seats distributed among each State in proportion of State’s population, with financial support up to Rs. 1lakh/seat in the form of Viability Gap Funding (VGF), with an outlay of Rs. 493 crore up to 31.03.2019. The scheme provides following financial supports:

B. Special Incentives: The following special incentives will be provided within the ceiling of total financial support i.e. Rs. 1 Lakh/seat:

1. Incentive for diversity & inclusion: Special incentive (% of eligible financial support) for Units providing employment to women and persons with disability will be provided as under:

Inclusion & Diversity

Special Incentive (% of eligible financial support)

50% women employment

5%

4% Employment of persons with Disability

2%

2. Incentive for providing employment beyond target: Special incentive (% of eligible capital support) for units providing employment beyond employment target (1.5 times the number of seats) will be provided as under:

Employment generation

Special Incentive (% of eligible financial support)

2 X no. of seats

5%

2.5 X no. of seats

7.5%

3 X no. of seats

10%

3. Incentive for wider dispersal within State including rural areas: Special Incentive (5% of eligible financial support) for units setting up BPO/ITES operations at locations other than the State Capital.

4. Incentive for promoting local entrepreneur: Special Incentive (5% of eligible financial support) for units setting up BPO/ITES operations as a consortium with local entrepreneur (Domicile of State/UT).

5. Special Package for Hilly Region (Himachal Pradesh, Uttarakhand and Jammu & Kashmir):The eligible entities can participate in the scheme with minimum 50 seats with average annual turnover of last 3 FYs as Rs. 1 Crore instead of minimum 100 seats with average annual turnover of last 3 FYs as Rs. 2 Crore.

A Company, availing financial support under IBPS, can also avail support under any other Scheme of the Central/State Government concerned other than similar financial supportavailed under IBPS.

Under the IBPS, the quantum of financial support shall be determined through an open bid system, subject to overall ceiling of Rs. 1 lakh per seat. This Scheme seeks to incentivize establishment of 48,300 seats in respect of BPO/ITES operations, at an outlay of about Rs. 493 crore, providing employment opportunities to about 1,45,000 persons considering three shifts BPO operations.

IBPS BPO Seats Distribution across State(s)/UT(s) based on population % as per Census 2011

State/UT

Population

Population %

Seats by population %

Seats Rounded-off to nearest hundred

Andhra Pradesh

493,86,799

4.56

2,189

2200

Bihar

1040,99,452

9.61

4,615

4600

Chhattisgarh

255,45,198

2.36

1,132

1100

Goa

14,58,545

0.13

65

100

Gujarat

604,39,692

5.58

2,679

2700

Haryana*

230,44,841

2.13

1,022

1000

Himachal Pradesh

68,64,602

0.63

304

300

Jammu & Kashmir

125,41,302

1.16

556

600

Jharkhand

329,88,134

3.05

1,462

1500

Karnataka*

525,95,898

4.86

2,333

2300

Kerala

334,06,061

3.09

1,481

1500

Madhya Pradesh

726,26,809

6.71

3,219

3200

Maharashtra*

889,10,077

8.21

3,941

3900

Orrisa

419,74,218

3.88

1,861

1900

Punjab

277,43,338

2.56

1,230

1200

Rajasthan

685,48,437

6.33

3,039

3000

Telangana*

274,44,644

2.53

1,214

1200

Tamilnadu*

634,51,020

5.86

2,813

2800

Uttar Pradesh*

1991,69,960

18.39

8,827

8800

Uttarakhand

100,86,292

0.93

447

400

West Bengal*

771,63,579

7.13

3,422

3400

Andaman & Nicobar Island

3,80,581

0.04

17

100

Chandigarh

10,55,450

0.10

47

100

Dadra & Nagar Haveli

3,43,709

0.03

15

100

Daman & Diu

2,42,911

0.02

11

100

Lakshadweep

64,429

0.01

3

100

Puducherry

12,47,953

0.12

55

100

Total

10828,23,931

100.00

48,000

48,300

Note:
1. Total 48,000 seats have been distributed based on population percentage among States/UTs as per Census 2011, and then rounded-off to nearest 100.
2. Minimum seats support for a State/UT = 1003. *Population of all the States of North East Region and Urban Agglomeration Population of certain cities [Bengaluru, Chennai, Delhi-NCR (Gurgaon, Faridabad, Noida), Hyderabad, Kolkata, Mumbai, Pune] is subtracted from the respective State's Population and subsequently from overall population of Country.

The duration of IBPS is up to 31.03.2019. The prospective units can apply under IBPS upto 31.03.2019, subject to availability of seats. However, considering disbursement schedule of the scheme, disbursement may go beyond 31.03.2019.

1. The bidder must be registered in India under The Companies Act, 1956 or The Companies Act 2013 (as amended till date), as applicable.

2. The bidder would be at liberty to bid for minimum of 100 seats and maximum 5000 seats either (a) at one location (city/State) or (b) at multiple locations (city/States) across the country. However, minimum number of seats to setup operation at a location is 50 seats.

To facilitate setting up large BPO/ITES units, the existing units under the scheme can expand their operation at the same location also by participating in fresh round of bidding. However, Maximum seats to one bidder are limited to 5000 seats across all States including the seats already approved/allotted.

3. The bidder must commit to operate for a minimum period of 3 years.

4. The bidder should have achieved a minimum average annual turnover during last 3* financial years, as per total number of seats applied under IBPS, detailed as follows:

Number of seats/bidder across States/UTs

Minimum Average Annual Turnover of last 3 FYs (Rs. in Crore)

50 [Available in HP, J&K, and UK only ]

1

100

2

101-500

5

501-1000

15

1001-2000

40

2001-5000

150

*To promote newly set up companies/entrepreneur, the average annual turnover criteria is relaxed from last 3 years to 1 completed audited financial year, with a condition that 100% Bank Guarantee is deposited against the disbursements of financial support.

OR

An entity registered under Companies Act but not able to meet above financial criteria, can form a Consortium with an Indian Company which is able to fulfill above financial eligibility criteria and other conditions. The eligible Indian Company must have at least 26 % equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years from date of commencement of BPO/ITES operations. The eligible Indian company of the consortium will be considered as bidder and fulfill all the eligibility conditions including turnover criteria and positive net worth.

OR

An entrepreneur or a Society (registered under Societies Registration Act, 1860 or State Society Registration Act) can form a Consortium with an Indian Company which is able to fulfill above financial eligibility criteria and other conditions. The eligible Indian Company must have at least 26 % equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years from date of commencement of BPO/ITES operations. The eligible Indian Company able to meet above financial criteria shall be the lead member of the Consortium or the bidder. (Criteria of Turnover and positive net worth of the eligible Indian company will be considered.)

OR

To facilitate setting up small BPO/ITES operations limited upto 100 seats only, an Entrepreneur or a Proprietary firm or an Entity registered under Companies Act but not able to meet above financial criteria or a Society (registered under Societies Registration Act, 1860 or State Society Registration Act) can form a Consortium with an Indian Company registered under Companies Act 1956/2013 fulfilling the above financial eligibility criteria together, subject to furnishing 100% Bank Guarantee. However, registered company under Companies Act 1956/2013 will be the prime bidder fulfilling all other terms & conditions. The registered Indian Company must have at least 26% equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years from date of commencement of BPO/ITES operations.

5. The bidder is neither allowed to expand BPO/ITES operations at the same city nor shifting of operations of any kind. However, an established BPO/ITES Company at one city may establish its operation at another city under the IBPS.

6. The bidder must commit itself to employ at least 1.5 times the number of seats (employment target) for period of 3 years, for which the bid is submitted and claim for financial support is to be subsequently made, after the commencement of BPO/ITES operations.

7. The bidder must furnish an undertaking to take either appropriate premises on lease for at least 3 years or produce the proof of ownership of the premises for setting up BPO/ITES operations at the location referred at (ii) above. [Minimum 40 Sq Ft per seat].

8. The bidder should have positive net worth in the last audited financial year statement, duly certified by a Chartered Accountant. If bidder is not able to fulfill positive net worth criteria, bidder may form a consortium with an Indian Company able to fulfill positive net worth in the last audited FY statement and other criteria(s) to be eligible.

9. The bidder should not be under a Declaration of Ineligibility for corrupt or fraudulent practices or blacklisted by any of the Government agencies. Self-Declaration should be given by authorized signatory.

The STPI will invite online Bids from the eligible companies through Request for Proposal (RFP), who are desirous of setting up BPO/ITES operations under IBPS.

A. Application Process:

(i) The companies interested in IBPS would require to submit its bid online in Two-Bid Format as per RFP, with Technical and Financial Bids, along with Bid security [Bid Security would be Rs. 5,000 ser seat].

(ii) In order to allow flexibility to the bidder to choose any location within a State based on business needs and ensure dispersal among bidders comparing their scale of operations, seats within a State has been categorized in Seat Slabs, detailed as under:

Seats Slab (SS) in a State

Number of Seats in a Slab

SS0 [Available in HP, J&K, and UK only ]

50

SS1

100

SS2

101-200

SS3

201-400

SS4

401-500

SS5

501-1000

SS6

1000+

(iii) Based on above Seats-Slab based approach, the distribution of Seats-Slab among each State/UT would be as under:

(iv) The bidder can make bid for a single State or Multiple States, subject to fulfilling turnover criteria and other terms and conditions.

B. Evaluation Process:

(i) The bids received by the Bid Submission End Date shall be opened by a duly Constituted Committee in the presence of the bidder(s) or their authorized representative(s), who may opt to be present.

(ii) A duly constituted Technical Evaluation Committee will proceed to evaluate the technical bids. Based on this evaluation, technically qualified bidders would be invited to the opening of Financial Bids on a subsequent date. The Financial Bids will be opened by a duly constituted Financial Evaluation Committee in the presence of the bidder(s) or their authorized representative(s), who may opt to be present.

(iii) The financial bids of the eligible bidders shall be evaluated as per the following approach:

a. In a State, bidder will give single bid in single Seat-Slab only. However, bidder may choose to setup BPO/ITES operations at a particular location or multiple locations within the State (minimum 100 seats at one location).

b. The bids will be evaluated State-wise (separately for each State) in a Round Robin manner as per Seat Slabs.

c. The lowest bidder (L1) for all Seat Slabs in a State will be determined, and bidder claiming the lowest among all Seat Slab will be declared successful.

d. Subsequently, the lowest bidder in ascending order from the other Seat Slab in a State will be declared successful in a Round Robin manner.

Example of Round-Robin Bidding Methodology in a State:

Seat-Slab

Bid amount in ascending order

Winner (L1)

SS1

S11(Rs. 80K)

S12(Rs. 82K)

S13(Rs. 84K)

S11

SS2

S21(Rs. 75K)

S22(Rs. 78K)

S23(Rs. 80K)

S21

SS3

S31(Rs. 70K)

S32(Rs. 72K)

S33(Rs. 74K)

S31

Order of winning S31, S21, S11 even if S22 < S11

e. If two or more bidders in a Seat Slab (L1 & L2 or L2 & L3 and so on) bid the same amount, then bidder quoting lesser number of seats will be considered first for ensuring wider dispersal. In case numbers of seats are also same for two or more bidders in a Seat Slab, then the bidder with higher net worth will be considered first.

f. After completion of one round across Seat Slabs, the second lowest bidder(s) and other bidders of each Seat Slab in the same sequence as determined in first round would be asked to match the lowest bid for capital support and on its acceptance such bids would be treated as successful bids, subject to availability of seats.

g. In case, there are less than three bids in a State, then these bidders may be offered to match L1 of the State having nearest lower match in terms of number of seats, seat slabs.

h. The Successful Bidders will be conveyed In-Principle Approval (IPA) by STPI, enabling it to take consequential steps for starting BPO/ITES operations. These Successful Bidders would be required to enter into an Agreement, separately for each location, with the STPI-HQ, within a period of two weeks from the date of issue of the above In-Principle Approval.

Disbursement of financial Support: The BPO Unit can request for release of advance of 10% of approved financial support after verification of COO(Commencement of Operation) by STPI, subject to furnishing Bank Guarantee of 10 % of approved financial support as per IPA valid for 3 years from commencement of operation and its verification by STPI. The eligible support as per the agreed amount shall be released in 3 yearly instalments, subject to fulfilment of all formalities and compliance with various conditions laid down in this scheme and submission of following documents:

(a) Aadhaar number of regular employees recruited/joined the unit after the issuance of In Principle Approval (IPA).

(b) PAN of regular employees recruited/joined the unit after the issuance of In-Principle Approval (IPA).

(c) Provident fund account number and Aadhaar linked Universal Account Number (UAN)for the regular employees recruited/joined the unit after the issuance of In Principle Approval (IPA).

(d) Proof of Employee State Insurance (ESI) contribution for the regular employees eligible under this scheme and recruited/joined the unit after the issuance of IPA.

(e) Proof of State Professional Tax, wherever applicable.

(f) Certificate of Disability issued by a Medical Authority (Notified by the State Govt.).

(g) Any other relevant documents.ss

The first instalment shall be up to 40% of the total eligible VGF, to be calculated on pro-rata basis, subject to at least 50% of employment target from commencement of operation and further subject to verification of required proofs/documents and site inspection by STPI. This instalment shall be claimed any time after one year from commencement of operation but not later than fifteen months from commencement of operation.

The Second instalment shall be upto 70% of total eligible VGF, to be calculated on pro-rata basis, subject to meeting at least 50% of employment target from commencement of operation and further subject to verification of required proofs/documents and site inspection by STPI. This instalment shall be claimed any time after twenty four months from commencement of operation, but not later than twenty seven months from commencement of operation.

The Third instalment shall be up to 100% of total eligible VGF, to be calculated on pro-rata basis, subject to meeting at least 50% of employment target from commencement of operation and further subject to verification of required proofs/documents and site inspection by STPI. This instalment shall be claimed any time after thirty six months from commencement of operation, but not later than thirty seven months from commencement of operation.

Procedure to calculate employment target for disbursement of financial support: Average monthly employment for the duration from commencement of operation till the time of request for release of financial support will be considered to calculate the eligible financial support for each instalment.

e.g. Assuming the estimated per seat expenditure for setting up BPO/ITES operations is Rs. 1,60,000/seat then the bid amount of the Unit shall be Rs.80,000/seat. If the unit wins the bid for 100 seats BPO/ITES operation @ ₹ 80,000/seat and the actual expenditure by the unit is Rs. 1, 60,000/seat or more, then the disbursement of financial support in different scenarios will be as under:

S. No.

Achieved average monthly Employment Target (E.T.) at the time of claiming 1st instalment from commencement of operation

Disbursed amount of financial support in 1st instalment (X% of E.T. * 40% of Total financial support - advance amount )

Achieved average monthly Employment Target (E.T.) at the time of claiming 2nd instalment from commencement of operation

Disbursement of Special Incentives: The special incentives is to be provided with/after the disbursement of 1st instalment of VGF on production of documentary proofs of employment as per Para 8(iii) above, subject to fulfilment of other terms and conditions:

(a) Incentive for diversity & inclusion: This incentive will be provided on subject to fulfilment of at least 50% of employment target.

(b) Incentive for providing employment beyond target: This incentive will be provided to the units providing employment beyond employment target i.e. 1.5 times the number of seats as stated above.

Q.2 Which IT Enabled Services are considered to be part of BPO operations?

A. As per Central Board of Direct Taxes (CBDT) notification No. 890E dated 26.9.2000, the list of eligible IT enabled services under BPO operations considered in IBPS are as under:

i) Back office operations

ii) Call centres

iii) Content Development or Animation

iv) Data Processing

vi) Geographic information System Services

vii) Human Resource Services

viii) Insurance Claim processing

ix) Legal Databases

x) Medical Transcription

xi) Payroll

xii) Remote Maintenance

xiii) Revenue Accounting

xiv) Support Centres

xv) Website services

As per NASSCOM, BPO includes following processes that may be IT-enabled, do not necessitate on-shore presence and are hence, offshore-able:

Customer Interaction & Support (CIS)- CIS includes all forms of IT-enabled customer contact; inbound or outbound, voice or non-voice based support used to provide customer services, sales and marketing, technical support and help desk services.

The above listed IT Enabled Services (ITES) from CBDT & NASSCOM are considered in IBPS under BPO/ITES operations.

Q.3 How local entrepreneurs can participate in IBPS?

A. An entrepreneur can form a Consortium with a Company registered anywhere under Companies Act 1956/2013 which is able to fulfil the other eligibility criteria(s). The eligible Indian Company must have at least 26 % equity shareholder in the Consortium and commit to maintain minimum equity shareholding (26%) for at least three years.

Q.4 Who is an entrepreneur?

A. The entrepreneur can be a sole proprietor, a partner or the one who owns the majority of shares in an incorporated venture.

Q.5 I am running non IT-BPO Company and fulfils all eligibility conditions under IBPS, can I participate in this scheme?

A. Yes, Any Indian Company registered under Companies Act 1956/2013 and fulfils other eligibility conditions can participate in IBPS.

Q.6 How the BPO Units setting up under IBPS will acquire business?

A. The units under IBPS need to acquire business by themselves. As per NASSCOM, Indian BPO Industry is growing ~8.1% Y-o-Y and other sectors like e-commerce, IT-ITES and other Services Sector are also growing. There are various Government programmes like Make in India, Digital-India and other e-governance initiatives like Common Service Centres, Health Card, Kisan Call Centre etc. are likely to create business opportunities for IT-BPO companies across the country.

Q.7 I am interested in IBPS, to whom I need to contact for any queries/clarifications?

A. DeitY has designated Software Technology Parks of India (STPI) as implementing agency for IBPS. STPI-HQ at New Delhi and other STPI Centres across the country can be contacted for any queries/clarifications regarding IBPS.

Q.9 I am already running a BPO unit at a City/District, can I setup another unit under IBPS at same location?

A. No, you can setup BPO unit under IBPS at different location.

Q.10 Whether all the employees of BPO/ITES unit will be considered in calculation of Employment Target?

A. To be considered in Employment Target, Technical and management staff should be at least 85% of total employment while support staff can be upto 15% of total employment provided.

Q.11 What is the procedure to do online bidding?

The detailed procedure for online bid submission is at Annexure-III of the RFP document. The online bidding will be done athttp://eprocure.gov.in/eprocure/app Please use keyword “IBPS” to search the tender document at http://eprocure.gov.in/eprocure/app For PPTs detailing procedure for submitting online bidsClick here.

A. NCR, as per definition of NCR Planning Board is excluded from IBPS. For other locations in case of excluded cities and State capital, their official definition as per respective State Government/Planning board would be considered.

Q.14 How to acquire necessary permissions and registration as per the DoT guidelines w.r.t. BPO operations?

Q.15 Can a company availing support under IBPS take support from any other Central/State govt. scheme?

A. A company availing capital support on admissible items from IBPS can not take similar support from other Central/State govt. scheme for the same unit. However, the company can avail other supports from any Central/State govt. scheme.

Q.16 If a company is already availing capital support from any Central/State govt. scheme, can it avail support from IBPS?

A. The companies already availing support from any Central/State govt. scheme, can avail the support from IBPS by setting up new unit at different location.